How much of your spending is habit? Whether it’s the size of your weekly takeout order or that streaming service you never watch, most people waste money on things they don’t need or won’t use.
Breaking bad money habits takes work, but it can be done. Here’s how:
- Monitor your accounts. Do you know how much money is in your checking account? Log in to check your balance at least once a month. In addition, use a spreadsheet or check register to maintain your own set of records, as this is the best way to catch discrepancies and avoid overdrafts. Do the same for your savings and credit card accounts.
- Automate savings. Instead of spending first and saving what’s left, make savings a scheduled bill. Set up a monthly transfer from checking to savings. This is a great way to build your emergency fund or set aside money for a vacation or a major purchase.
- Shop from a list. Having a list makes it much harder to indulge in impulse purchases. If certain stores or websites are difficult to resist, only go to them when you are buying a specific item.
- Set rules. If you want to stop spending when you shouldn’t, set some rules, as well as consequences for if you break them. For example, if you spring for takeout during the week, that means you can’t order it on the weekend.
- Share your financial goals. Tell people you trust about your goals and ask for their help in holding you accountable. Having someone who will ask “How is your house savings plan coming along?” once in a while will help you stay on track. Share your goals with people who will encourage and uplift you, not offer shame or ridicule.
- Believe in yourself. Stop saying, “I’m bad with money.” Instead, commit to learning new things about finances and exploring ways that you can grow your money management skills. Over time, a pattern of good decisions will help you gain confidence in your ability to create and maintain a state of financial security.
- Accept mistakes. Even the best money managers occasionally slip up or go on a spending spree. If this happens, take a step back, evaluate why you stopped following your own rules, and start again. Creating good financial habits takes practice.
Source: Balance
